Once upon a time, getting your first car was the ultimate coming-of-age moment. Fast forward to 2025, and Gen Z seems to be collectively saying: “Eh, we’re good.” Car ownership is down, driving rates are lower than ever, and automakers are sweating a little. So why is Gen Z ghosting car ownership—and what are car companies doing to win them back? The answer it’s a little more complicated than “they just prefer scooters.”
It’s the Cost, Obviously
Let’s start with the obvious: cars are expensive. Really expensive. The average annual cost of owning a car in the U.S. is now over $12,000, and that’s if you don’t get slapped with a surprise repair bill or ticket. Between insurance, gas, maintenance, parking, and loan payments, it’s no wonder Gen Z—many of whom are still in school or working entry-level jobs—are tapping out.
Add student loans and rent into the mix, and you’ve got a generation doing the math—and deciding a car just doesn’t make sense.
Urban Living + Smart Alternatives
Gen Z is embracing urban life—and the mobility options that come with it. Many in this generation are gravitating toward dense, walkable cities where owning a car isn’t just unnecessary—it’s inconvenient.
Between traffic, parking costs, and limited space, having a personal vehicle often feels more like a burden than a freedom. In cities like New York, San Francisco, and Chicago, public transportation, biking, walking, and micro-mobility (like scooters or e-bikes) offer faster and cheaper alternatives to sitting in traffic or hunting for parking.
According to recent reports, Gen Z riders are among the fastest-growing demographics for urban transit use, particularly in cities with reliable infrastructure. When the subway gets you downtown faster than driving—and you can read or scroll on the way—why bother with a car?
Then there’s the tech-driven side of the equation. Ride-hailing apps like Uber and Lyft have become staples: a Pew-affiliated study in 2018 found that 51% of adults aged 18–29 had used ride-sharing services, up from 28% in 2015. That figure has likely climbed even higher post-pandemic, as urban Gen Zers increasingly turn to their phones for frictionless mobility.
Food delivery is even more embedded. Nearly 63% of Gen Z regularly use apps like Uber Eats, DoorDash, or Grubhub—far more than older generations. CivicScience data shows 54% of 18–34-year-olds are monthly active users of at least one major delivery app.
When rides, meals, and even groceries show up with a few taps, the idea of spending thousands on a car you rarely use just doesn’t compute. Add in peer-to-peer car sharing platforms for weekend getaways or errands, and the logic becomes clear: you don’t need to own a car—just access to one when you need it.
Different Priorities
In many ways, owning a car just doesn’t have the same shine it used to. For a lot of Gen Z, the whole “car as a status symbol” idea feels kind of outdated. Today’s young adults are more likely to flex with minimalism, sustainability, or life experiences like trekking through the Andes.
In fact, a 2023 Eventbrite report found that nearly 8 in 10 Gen Zers would rather spend money on an experience than a material good. This lines up with a broader shift: Gen Z is more interested in travel, wellness, and creative self-expression than traditional status markers.
Social media plays a huge role too—posting about a road trip in a van you borrowed is cooler than showing off a car payment. And with everything from clothes to tech becoming subscription-based, the idea of owning something big and expensive just isn’t as appealing.
But Do They Even Drive?
Here’s another twist: a lot of Gen Z just didn’t get their license at 16. Or 18. Or even 21.
In 1983, about 46% of 16-year-olds had their license—but by 2021, that number had dropped to just 25%. Even by age 18, licensure fell from 80% in the early ’80s to about 60% today. It’s not just teens either—among 20–24-year-olds, the number holding a license has dropped from 87% in 1995 to 81% in 2021.
So, Is Gen Z Killing Car Ownership?
Not exactly. They’re just redefining it. While fewer Gen Zers are rushing to own cars outright, many still see value in having access to one—on their terms. That might mean subscribing to a car, borrowing one through an app, or choosing an EV with eco cred.
As Gen Z grows older and starts families, demand may pick up again. But the traditional model of car ownership as a rite of passage? That might just be left in the rearview mirror.